Interstate Sherman & Interstate Commerce Act
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Interstate Commerce Act & Sherman Antitrust Act
MASTUS History Period 4Ms. Richardson
AIM: How did the government respond to big business in the late 1800s?
SWBT analyze the Interstate Commerce Act (1887) and the Sherman Antitrust Act (1890) and evaluate their effectiveness.
The Interstate Commerce ActInter between Commerce trade
How many government regulatory agencies exist?
List 1 positive & 1 negative effect trusts can have:
GOAL: Eliminate unfair business practices by regulating big businessincrease economic competitiveness ICC would serve as a model for future government regulation of private business.
What was the primary goal of the Interstate Commerce Act?
To eliminate unfair business practices by regulating big business.*
Interstate Commerce Commission (ICC) would serve as a model for future government regulation of private business.
BEFORE ICA & AFTER ICAStates were powerless to regulate [control] interstate commerce Railroads were privately owned & unregulated* Railroad monopolies had the power to:set pricesexclude competitorscontrol the market in several locationsProvided discount to large shippers or buyers
Federal regulation [control] of railroad industry* Publicly posted "just and reasonable pricesBan on rebates and pools*Railroads required to submit* annual reports to the ICC
Why are states powerless to regulate interstate commerce? The Commerce Clause Constitution (Article I, Section 8, Clause 3) Wabash, St. Louis & Pacific R.R. v. Illinois (1886)
Wabash, St. Louis & Pacific R.R. v. Illinois (1886)
Declared that states could not regulate commerce that went beyond their boundaries. Instead, regulation had to come from the federal government.
SHERMAN ANTI-TRUST ACT (1890)(John) Sherman Ohio Senator and main writer of the Sherman Antitrust Act.
Trust an alliance of companies, run by a board of trustees that function as one company. (Super corporation)
SHERMAN ANTITRUST ACT (1890)Made it illegal to form a trust that interfered with free trade between states or with other countries.
How Effective Were They? Interstate: Faced difficulty regulating railroad rates. Why? Too much paperwork. Did not have the power to be effective. Supreme Court rule the ICC could not set maximum railroad rates. Sherman: Did not define the term trustWhen the government cracked down on super corporations they reorganized into a single corporation. LOOPHOLE!
THE 3 GOALS OF BUSINESS Maximize profits
"The Bosses of the Senate
"The Bosses of the Senate," J. Keppler, Puck, 188912